Yes, although I am pretty sure that while they can't do it legally, some do it anyway.These private insurance plans only supplement certain things not covered such as prescription drugs, dental and vision. They do not offer alternative private medical care as in the US for services like surgery.
But as you can see, many countries have found ways to make it function. Whether that is actually unstable is an interesting question, and studying how (for instance) Australia does it could help clarify what would or would not work in Canada.